Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller
Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller
0
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
An elderly gentleman, who submitted a claim on behalf of his injured wife, has successfully resolved his dispute against his insurance company.
The Australian Financial Complaints Authority ruled in favor of the complainant, finding that he had been misled into thinking he had coverage.
The claim was initiated after the man's wife had a severe fall down a flight of stairs during their trip to Thailand. She sustained multiple injuries, including a fractured hip and head trauma, which required her to be hospitalized for more than three weeks. Additionally, to ensure a safe journey back to Melbourne, the claimant had to purchase a business class flight for his wife, allowing her to lie flat and minimize the risk of complications.
Zurich Australia denied the claim based on the policy's exclusion of overseas medical expenses for individuals over 80 years old. However, Zurich claimed to have offered an "upgrade" to the policy, providing medical coverage for individuals over 80, which the claimant did not opt for.
The complainant obtained the policy through a local branch of his bank, referred to as CB, which offered it as a benefit for specific credit card holders. At the time of purchasing the policy, both the complainant and his wife were 81 and 80 years old, respectively.
Making an effort to follow the correct procedure given his limited computer skills, Mr. E visited the local CB branch on June 30. He expected the staff to guide him through the application process for the policy.
Mr. E alleged that the CB staff failed to inform him about the need to "upgrade" the policy in order to ensure adequate coverage for medical expenses. He left the bank under the impression that he and his wife were appropriately insured, even receiving an email confirmation from the insurer stating that the policy had been activated.
AFCA considered the claimant's assertion that a bank teller, referred to as SH, had assisted him during the application process. Despite Zurich's objections, the ruling ombudsman agreed with Mr. E's account.
The ruling acknowledged that SH had neglected to disclose the requirement to "upgrade" the policy, necessary for the claimant and his wife to have coverage, despite the bank being aware of their age. It stated that although SH's actions were unintentional, CB caused the insured party to believe they had suitable coverage.
"Given CB's knowledge of the complainants' age, this omission should have been disclosed," AFCA stated.
"SH's oversight significantly contributed to Mr. E's unwitting failure to apply for the policy upgrade. Furthermore, this omission induced Mr. E to enter into an insurance contract that he believed provided adequate coverage. However, unbeknownst to him, the policy was essentially useless in terms of overseas medical expense coverage for both him and Mrs. E."
Zurich argued that CB employees were not authorized representatives and thus were unable to offer any advice on the credit card insurance being offered. However, AFCA dismissed this argument as an attempt by the insurer to absolve itself of CB's shortcomings, stating that the bank acted, at least partially, in the insurer's interest.
The decision mandates that Zurich accept the claim and provides a compensation of $4000 ($2000 for each complainant) for non-financial losses resulting from the insurer's claim denial and subsequent challenges.
"Throughout the claims process, the insurer's stance has unfortunately caused the complainants, particularly Mr. E, to feel accused of dishonesty," expressed AFCA.
"They also feel that their recollections have been questioned. Moreover, the insurer's position in this claim has been based on flimsy evidence."
Published:Friday, 17th Nov 2023 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Insuregroup, a specialist insurance brokerage serving Australia's transport and logistics sector, has recently announced a significant milestone: processing over 10,000 insurance policies since its inception, with a 25% increase in policy volume over the past year. This growth underscores the escalating demand for comprehensive truck insurance solutions tailored to the unique needs of Australian freight operators. - read more
The Australian life insurance sector has reported a substantial after-tax profit of $360 million for the June 2025 quarter, marking a significant increase from the $116 million recorded in the same period the previous year. This impressive growth is primarily attributed to a sharp rise in investment income and improved underwriting performance across key product lines. - read more
The Australian life insurance industry is witnessing a significant surge in mental health-related claims, reflecting broader societal challenges and increasing awareness of mental health issues. AIA Australia, a leading life insurer, has reported that mental health claims now account for 23% of its total claims, up from 15% in 2014. This trend underscores the growing prevalence of mental health conditions and their impact on individuals' ability to work and maintain financial stability. - read more
Recent data indicates a notable decline in life and income protection insurance premiums across Australia, providing consumers with more affordable coverage options. According to the latest Direct Life Insurance Report from Rainmaker Information, direct life premiums have decreased by 7% since 2024. Similarly, direct income protection premiums have seen significant reductions, with average premiums for waiting periods of 30 days and 90 days decreasing by 12% and 13%, respectively. - read more
Club Marine, Australia's largest recreational boat insurer, is celebrating its 65th anniversary in 2024. Since its founding in 1959 as Marine Hull & Liability, the company has grown from a small operation in Victoria to a nationwide provider of insurance services for the country's boating community. - read more
Life insurance can seem complex at first, but understanding the basics can help demystify this important financial product. At its core, life insurance is a contract between you and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon your passing, in exchange for premium payments. - read more
Life insurance is a fundamental component of a robust financial plan, yet its significance is often underestimated. It serves as a safety net, ensuring that your loved ones are financially secure in the event of your absence. Understanding life insurance is the first step towards safeguarding your family’s future. - read more
As the landscape of finance and personal security evolves in Australia, the importance of being insured has never been more prominent. In a world of changing family dynamics, economic pressures, and higher living costs, life insurance stands as a bastion of support ensuring the well-being of loved ones in the event of unforeseen circumstances. - read more
Life insurance and estate planning are critical components of financial security. They ensure that your loved ones are protected financially when you are no longer around. By understanding these tools, you can take significant steps to secure your family's future. - read more
For many millennials, navigating the complexities of personal finance and future planning can feel like a bewildering journey. Among these financial responsibilities, life insurance emerges as a paramount consideration. More than just a safety net, life insurance can be the cornerstone of a sound financial strategy, providing peace of mind for both the policyholder and their loved ones. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Waiting Period: The time period that must pass after filing a claim before the insurance coverage becomes effective or benefits are paid.
